Milestone for the future: LR launches business in Russia
- Market entry 1st of June 2011
- Initial investments of several million Euros
- Gross sales target of over 100 million Euros for the first three years
LR Health & Beauty Systems GmbH continues to grow, not only in terms of turnover and staff but also through entry into additional markets. The global company for cosmetics, body care and nutrition will launch business in its 32nd country on 1st June 2011: Russia. From its headquarter in Moscow, the German global player will offer its comprehensive product range via numerous sales partners. The portfolio ranges from celebrity fragrances, Aloe Vera products and decorative cosmetics through to nutrition. The goal is clear: rapid expansion of the LR concept which has proven its success over more than 25 years. Additional national offices, distribution centers and warehouses are to follow. LR’s initial investment amounts to several million Euros and the company expects a gross sales volume of over 100 million Euros in the next three years.
Russia provides great opportunities
“After two years of intensive preparation, we now look forward to the market launch in Russia. This extraordinary country - with its people and market - provide excellent opportunities. Moreover direct sales in Russia show outstanding development. Two-digit growth rates are on the agenda. And: the forecasts clearly confirm that the Health & Beauty sector is the future. Furthermore, LR has a lot to offer as a global player from Germany: the company stands for passion, trust and responsibility. We have five unique success factors: Innovative products of uncompromising German quality standards. We cooperate closely with top celebrities. We offer our sales partners a fair and transparent business concept and bonus system (marketing plan) and a professional car plan, training and service, which is unique on the market. The demand of existing and potential sales partners is already enormous. Therefore, our aim is to offer many people a reputable and successful extra income. Our vision is clear: We intend to become one of the global leading direct sales companies. To this end, Russia is a huge milestone for sustained success,” said Dr. Jens M. Abend, CEO of LR Health & Beauty Systems, with delight regarding the imminent launch.
Attractive location in the center of Moscow
LR is launching its business from its headquarters in Moscow. The newly established distribution center (DSC) in Tulskaya Business Center is the perfect location for the delivery and collection of products. The company has an office complex, meeting rooms and a warehouse. It is envisaged to set up comparable locations at strategically important sites in future. “There are already thousands of pre-registered sales partners who want to work for LR in Russia. We expect a high five-digit amount of them until 2012. Moreover we plan to have five to ten additional DSC in the years to come. We are really looking forward to future challenges and possibilities,” said General Director for Russia, Dr. Sharmila Chatterjee, with optimism for the future.
Direct Sales - A promising industry
This trend is confirmed by the development of the number of direct sales partners in Russia. From 2006 to 2010 the number increased by 76 percent from 2.5. to 4.4 million* according to the local Direct Sales Association (DSA). The beauty products market is particularly lucrative in Russia. In comparison to other markets, Russia shows higher frequency in the use of beauty products. Russia records 20 percent in comparison to 11 percent of the world population**. Lipsticks, for example, have a worldwide usage of 3.8 percent compared to 7.8 percent in Russia**. While care products have been widely established in direct sales, there is still a major potential in wellness products. The proportion of the population already consuming these products amounts to only 8 percent. However, the growth of ‘Wellness products’ category for the period 2008 to 2010 is 39% by direct sales*.
*Source: DSA Russia refers to employees of DSA member companies
**Source: www.cosmeticsdesign-europe.com/Financial